From the column:
Now that the Wrigley Field package has been approved, the Cubs can turn their attention to another deal that will have dramatic implications for the financial future of the franchise.
Negotiations are expected to heat up between the Cubs and WGN-Ch. 9. Technically, their pact runs through 2022, but the Cubs are exercising a clause to opt out after the 2014 season. At stake for the Cubs is a chance to cash in on exploding local TV rights fees. The Dodgers, Angels, Rangers and Mariners recently have signed long-term rights deals in the billions. Yes, billions.
By comparison, the current value of the Cubs package with WGN-Ch. 9, estimated at $20 million per year for 70 games, feels like utility infielder money. Some projections have the Cubs receiving as much as $80 million annually for those games. The team’s other games will be on CSN through at least 2019.
Yet before Chairman Tom Ricketts starts counting the additional TV cash, there are real questions about whether the Cubs are positioned to receive a windfall of their own; the possibility that WGN might end a relationship that dates back to 1948; and if the team will begin to lay the foundation for its own network.
Nobody from the Cubs or WGN is willing to comment, mainly because there are too many things to figure out.
“At this point, it is really complicated,” said a source close to the situation. “No option has been eliminated.”
Here are some of the issues:
•Still super? There is a provision in the contract that allows WGN to extend the Cubs rights by paying “fair market value.” However, that seems difficult to determine because there isn’t a comparable arrangement in baseball. The other recent deals were for cable, while WGN operates as a free, over-the-air signal in Chicago.
This relationship has defined both the Cubs and WGN. Everything, though, comes to an end.
There is speculation that WGN might go the route of TNT and TBS (which formerly aired Braves games) and become a complete national outlet featuring mainly entertainment programming.
“You could produce a lot of shows for $80 million (per year),” said one source familiar with the network’s stance.
Meanwhile, would the Cubs forsake the exposure of being in 75 million homes through WGN America? The superstation helped the Cubs make millions during the heyday of Harry Caray. However, a proliferation of Major League Baseball games available on various cable outlets has blunted the novelty of the Cubs going coast-to-coast.
Experts believe the Cubs would leave WGN if they could get more money elsewhere. Exposure won’t buy high-priced free agents.
•Leverage problem: The mega Dodgers deal ($7 billion over 25 years) stemmed from having multiple suitors. Time Warner eventually won a heated battle over Fox Sports’ regional station in Los Angeles.
A similar situation doesn’t appear to exist in Chicago. And don’t say: What about moving the WGN games to CSN? There’s no room at the inn at CSN, which has a full slate of White Sox, Bulls and Blackhawks games. According to sources, the network isn’t interested in having more scheduling conflicts that would cause spillover games to air on CSN Plus, where they traditionally do much weaker ratings.
So where is the leverage for the Cubs here? There had been some speculation that Fox could become a player, airing games on WFLD-Ch. 32 and WPWR-Ch. 50. However, sources indicate the network hasn’t jumped into the fray yet.
Obviously, that could change, but for now, there appears to be only one network in the race. If that’s the case, what would compel WGN to give the Cubs a big rights increase?
•Cubs network: Forget about the recent sagging ratings. TV observers say the Cubs have enough of a fan base to follow the lead of the Yankees and Red Sox and start their own network.
“When they get good, their ratings are going to explode,” said a source.
The Cubs, though, can’t go on board with their own network until their CSN deal runs out in 2019. However, they could use this current negotiation to lay the foundation for a Cubs channel beginning in 2020.